EconomyxAI · Sector Watch May 2022Released June 1, 2022 |
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Conditions index +0.04 avg of 11 sectors, −2 to +2 |
| Outlook index −0.09 sectors with an outlook |
| Districts growing 12/12 per National Summary |
| Positive momentum 2/11 sectors improving |
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This release in brief The read | ■ | Released June 1, 2022, with information collected on or before May 23, 2022. | | ■ | All twelve districts reported continued growth, mostly slight or modest; four noted the pace had slowed. | | ■ | Manufacturing kept growing; retail softened as consumers faced higher prices; residential real estate weakened on high prices and rising rates. | | ■ | Eight districts said growth expectations diminished and three cited recession concerns; prices rose strongly with some customer pushback. |
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Sector prospects Where the 3–12 month view points Strongest prospects | Industrials
XLI
▼ Turning down | +0.07 |
| Consumer Staples
XLP
▶ Steady | +0.06 |
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| Weakest prospects Real Estate
XLRE
▼ Weakening | −0.52 |
| Financials
XLF
▼ Turning down | −0.33 |
| Consumer Discretionary
XLY
▼ Turning down | −0.33 |
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All 11 GICS sectors, ranked Sector scoreboard | # | Sector | −1 0 +1 | Score | Signal | Now | Outlook | Mom. |
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| 1 | Energy
XLE | | +0.39 | Leaning Favorable | +0.61 | +0.50 | ▶ −0.04 | | 2 | Industrials
XLI | | +0.07 | Neutral | +0.68 | +0.00 | ▼ −0.43 | | 3 | Consumer Staples
XLP | | +0.06 | Neutral | +0.16 | +0.00 | ▶ +0.10 | | 4 | Health Care
XLV | | +0.02 | Neutral | +0.00 | +0.00 | ▶ +0.13 | | 5 | Utilities
XLU | | −0.01 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 6 | Communication Services
XLC | | −0.07 | Neutral | −0.15 | +0.00 | ▶ −0.07 | | 7 | Materials
XLB | | −0.17 | Leaning Unfavorable | −0.19 | +0.00 | ▼ −0.41 | | 8 | Information Technology
XLK | | −0.32 | Leaning Unfavorable | −0.47 | +0.00 | ▼ −0.77 | | 9 | Consumer Discretionary
XLY | | −0.33 | Leaning Unfavorable | +0.05 | −0.50 | ▼ −0.46 | | 10 | Financials
XLF | | −0.33 | Leaning Unfavorable | −0.22 | −0.50 | ▼ −0.24 | | 11 | Real Estate
XLRE | | −0.52 | Unfavorable | −0.02 | −0.50 | ▼ −1.15 |
Prospect Score blends current conditions, district outlooks, momentum, a sector-specific macro tilt and margins. Now = weighted current conditions; Outlook = n/a when too few districts gave one; Mom. = change vs the average of the two prior releases. |
National Summary, scored −2 to +2 Macro backdrop | Overall Economic Activity | | +0.25 |
All districts grew, mostly slightly or modestly; four said growth slowed. | Employment rose modestly or moderately; some signs tightness easing. | | Inflation Pressure (higher = headwind) | | +1.50 |
Strong or robust price increases; three districts saw some moderation. | Lending mixed; financial conditions deteriorated with rising rates. | Eight districts reported diminished expectations; three cited recession concerns. |
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Current conditions in each Fed district District by sector | BOS | NY | PHL | CLE | RIC | ATL | CHI | STL | MIN | KC | DAL | SF |
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| Information TechnologyXLK | · | · | · | · | · | · | · | · | · | · | · | −1 | | Health CareXLV | · | · | · | · | · | · | · | · | · | · | · | · | | FinancialsXLF | · | −1 | · | · | · | +1 | −1 | · | · | · | +1 | · | | Consumer DiscretionaryXLY | +1 | −1 | −1 | −1 | +1 | · | · | · | · | · | −1 | +1 | | Communication ServicesXLC | · | −1 | · | · | · | · | · | · | · | · | · | · | | IndustrialsXLI | · | −1 | · | −1 | +1 | +2 | +1 | +1 | · | +1 | +1 | +1 | | Consumer StaplesXLP | · | · | · | +1 | · | · | +1 | · | · | · | · | · | | EnergyXLE | · | · | · | · | · | +1 | · | · | · | +1 | +1 | · | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | · | +1 | · | −1 | −1 | −1 | −1 | · | −1 | · | −1 | +1 | | MaterialsXLB | · | · | · | −1 | · | · | +1 | · | · | · | · | −1 |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Real Estate −1 Dallas Builder cancellations up; traffic disappointing. Why it matters: Large Real Estate weight. | Industrials +2 Atlanta Manufacturing remained strong. Why it matters: Strongest Industrials read. | Industrials −1 New York, Cleveland Manufacturing turned down; demand softened. Why it matters: Industrials offsets. | Consumer Discretionary −1 New York, Dallas Consumer spending slowed; retail sales fell. Why it matters: Large Discretionary weights. | Financials −1 New York, Chicago Loan demand lower; financial conditions deteriorated. Why it matters: Large Financials weights. | Consumer Discretionary +1 San Francisco Demand for services rose considerably. Why it matters: Large Discretionary weight. |
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Twelve Fed districts District roundup Boston Growing +0.5 Outlook ▶ Increased slightly. |
| New York Growing +0.5 Outlook ▶ Growth slowed to a modest pace. |
| Philadelphia Growing +0.5 Outlook ▼ Grew slightly, slower than before. |
| Cleveland Growing +0.5 Outlook ▶ Decelerated and was slightly positive. |
| Richmond Growing +0.5 Outlook ▶ Grew at a modest rate. |
| Atlanta Growing +0.5 Outlook ▶ Expanded at a modest pace. |
| Chicago Growing +0.5 Outlook ▶ Increased modestly. |
| St. Louis Growing +0.5 Outlook ▼ Improved at a modest pace. |
| Minneapolis Growing +1.0 Outlook ▶ Grew moderately. |
| Kansas City Growing +1.0 Outlook ▶ Grew at a moderate pace. |
| Dallas Growing +1.0 Outlook ▼ Slowed to a moderate pace. |
| San Francisco Growing +1.0 Outlook ▶ Expanded moderately. |
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Where the signal is thin or split Divergences to watch | Real Estate — Dallas -1 and broad softening offset SF +1, pulling the weighted score down sharply.
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| | Consumer Discretionary — New York and Dallas -1 outweigh SF +1, holding the weighted score near zero.
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How to read this. Each Fed district’s report is scored −2 (strong contraction) to +2 (strong expansion) for each GICS sector, then weighted by the district’s share of that sector’s activity. The Prospect Score blends current conditions (25%), district outlooks (35%), momentum (20%), a sector-specific macro tilt (10%) and margin pressure (10%). The Beige Book describes regional activity, not earnings or valuations. Weights and sensitivities are illustrative. This newsletter is for information only and is not investment advice. Source: Federal Reserve Beige Book · Scored by EconomyxAI |